<div class="phx-topic abstract-wrapper">Two of the three top container lines say that the Department of Justice has closed its investigation into the container shipping industry and released them from their related obligations.
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Two of the three top container lines say that the Department of Justice has closed its investigation into the container shipping industry and released them from their related obligations.

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<div>Two years after US antitrust investigators raided the biannual Box Club meeting, two of the three top container lines say that the Department of Justice (DOJ) has closed its investigation into the container shipping industry and released them from their related obligations.Maersk Line on Tuesday said it had been released from any obligation under the grand jury subpoenas <a>issued during the March meeting</a> of the International Council of Containership Operators, commonly known as the “Box Club.” In a separate statement, Mediterranean Shipping Co. said it had also been similarly informed by the DOJ and that no charges or penalties had...

Two years after US antitrust investigators raided the biannual Box Club meeting, two of the three top container lines say that the Department of Justice (DOJ) has closed its investigation into the container shipping industry and released them from their related obligations. Maersk Line on Tuesday said it had been released from any obligation under the grand jury subpoenas issued during the March meeting of the International Council of Containership Operators, commonly known as the “Box Club.” In a separate statement, Mediterranean Shipping Co. said it had also been similarly informed by the DOJ and that no charges or penalties had been imposed. The Box Club includes the CEOs of all the major container lines and allows only the heads of each company to participate at its twice-yearly meetings. It makes no announcement of its plans to meet, meeting locations, nor what was discussed. The meeting provided antitrust regulators a rare window to exercise their power over non-US-based companies. US antitrust attorneys sit in on the meetings, even when held outside the United States, to ensure discussions don't veer into legally precarious territory such as pricing. Typically, the group also invites economists or industry analysts to address it on current topics of interest. Under limited US antitrust authority granted by federal maritime regulators, container lines that belong to discussion agreements are permitted to meet to discuss and agree on voluntary rate guidelines. If the carriers exceed this authority by jointly fixing rates, however, they are subject to antitrust prosecution by the DOJ. Carriers retained this limited antitrust immunity in the last major revision of US shipping law: the Ocean Shipping Reform Act (OSRA) of 1998. Before the OSRA, carriers jointly set rates through legalized cartels known as conferences, and shippers and carriers were prohibited from negotiating confidential contracts with each other. The OSRA undercut conferences by legalizing confidential contracts, which quickly became the norm. Carriers then established discussion agreements that, when approved by the Federal Maritime Commission (FMC), are permitted to establish voluntary guidelines but prohibited from fixing rates. The most recent example of a major DOJ antitrust prosecution of carriers came in a Baltimore-based case, in which roll-on/roll-off carriers Wallenius Wilhelmsen Logistics, “K” Line Japan, NYK Line Japan, and CSAV pleaded guilty to price-fixing charges and were fined a total of more than $230 million, and several former carrier executives pleaded guilty and received prison terms. Several of the carriers were also penalized by regulators in the European Union, Japan, Australia, and South Africa. Another DOJ prosecution of carrier price-fixing came several years earlier in the US mainland-Puerto Rico trade, which as a domestic service is not covered by the limited antitrust immunity that international carriers enjoy under OSRA. In that case, Horizon Lines, Sea Star Line, and Crowley Maritime pleaded guilty to price-fixing charges and paid multi-million-dollar criminal and civil penalties, and six former Horizon and Sea Star officials were sentenced to prison for their parts in the scheme. Antitrust investigators believe that due to a history of legally having the ability to discuss pricing under antitrust immunity, the industry lacks a disciplined culture and is therefore susceptible to illegal activity. For example, the DOJ regularly issues a statement raising concerns after the FMC allows a shipping alliance or major vessel-sharing agreement (VSA) to take effect. Carriers’ rejoinder is that rates fluctuate wildly and are determined solely on the basis of supply and demand. Overcapacity in recent years has driven rates down, and industry profitability has swung from billion-dollar losses to a $1.5 billion profit in 2017, according to Drewry. The maritime analyst said the industry ended 2018 with a $500 million profit, and it expects the sector to report $4 billion in earnings before interest, taxes, and amortization (EBITA) this year. Regulators in the US and elsewhere investigate the container shipping industry on a fairly regular basis, but the vast majority of investigations do not result in any further action. One carrier told JOC.com, “Container carriers have been cleared every time an investigation was ever launched in other countries around the globe, not only in the US.” The European Commission’s Directorate-General for Competition is currently in the process of reviewing its consortia block exemption for container carriers to determine whether it should be extended for a further five years. The debate has provided shippers with an opportunity to voice longstanding frustration over carrier alliances and VSAs, which they claim have resulted in diminished service levels, but analysts expect both alliances and VSAs to remain in place even in the event the commission decides not to extend the exemption.

Container lines

US antitrust probe of container shipping ends

<div class="phx-topic abstract-wrapper">The handling and transportation of space components is opening up new opportunities for project cargo forwarders. </div>

The handling and transportation of space components is opening up new opportunities for project cargo forwarders.

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<div class="phx-topic">Project cargo and breakbulk shipping company/forwarder Compagnie Maritime Nantaise (MN) has drawn up plans for a newbuild vessel designed specifically to meet the needs of the burgeoning space logistics project cargo sector. Part of the Sogestran group, MN’s fleet includes the MN Toucan and MN Colibri, built in 1995 and 2000, respectively, and designed in cooperation with the European Space Agency (ESA) Arianespace program, for which MN managed vessel operations over four decades. Those dedicated vessels for space-related cargoes have carried the Euclid telescope from Savona, Italy, to Port Canaveral; the largest European geostationary satellite from Fos in France to Kourou, French Guiana; and the James Webb telescope from Seal Beach, California to Kourou. “The MN Toucan and MN Colibri are older vessels but very well maintained,” Mathias Audrain, MN’s commercial and business development manager, told the Journal of Commerce. “However, 2026 will see a new vessel order which will meet full space industry requirements, to carry all kinds of launchers and satellites.” The vessel will be specifically designed for the space industry and could be joined by a second order in 2026. “We must have two vessels because delays are not permitted in this industry,” Audrain said, adding the first vessel could be ready in less than three years. Despite its promised sophistication, the ship will be restricted to a maximum length of 120 meters to access Kourou port in French Guiana and other small ports. “Access to Kourou is tricky, via a narrow river, so we are limited on length,” Audrain said. “The main characteristics will be close to our present vessels, which cross the Atlantic with a five-meter draft but then we are able to de-ballast when we arrive, reducing draft to three meters in order to reach the Kourou pier.” <h3>Dealing with bureaucracy </h3>Modules and components transported for space range from overweight, oversize rocket sections and launchers to tiny, fragile and temperature-sensitive items – and yet geopolitics and bureaucracy, rather than the cargo itself, are said to present some of the toughest and most complex headaches for logistics specialists. Craig Russell, project manager at freight forwarder Pinnacle International Freight in the UK, described handling and shipping as the “relatively easy part.” He said the main challenges are geopolitical. “How do you move technologically sensitive components that could be under export controls, or how do you support cross-border collaborations with customs?” he said. Britain’s exit from the European Union has added to the complexities for shipments between the UK and EU, and the trade and tariff disputes set off by the Trump administration have also had their impact, along with ever-changing sanctions regimes. Pinnacle has an office at Space Park Leicester, a UK hub for space research located within the East Midlands Freeport. Russell believes there are massive opportunities ahead for project cargo logistics as space operations continue to soar. Freeport status could open opportunities for manufacturing, consolidating and assembling satellites and other products for export, but only if managed correctly. “This is a case of the [UK] government going top level down, putting these freeports in but without the practical support of how applying and managing a customs bonded facility works,” Russell said. Conversely, the US used to be relatively easy to navigate for space logistics because many products were duty free and could move in and out freely. Now, duties, temporary import bonds and other procedures make the process more complicated. Plus, geopolitical factors mean that trade partners for products and services change frequently. “In short, it is the procedural and compliance side rather than the practical that is raising the challenges,” Russell said. Security is tight and confidentiality is essential in this sector – and there is no room for error, he added. “Transporting space components is complex and planning can start several months – even years – before just one transport,” Russell said. “Everything must go smoothly – it is not during the operation that you should discover any issues. It’s a case of check, check and triple check.” Contact Felicity Landon at <a href="mailto:felicity@felicitylandon.com">felicity@felicitylandon.com.</a></div>

Project cargo and breakbulk shipping company/forwarder Compagnie Maritime Nantaise (MN) has drawn up plans for a newbuild vessel designed specifically to meet the needs of the burgeoning space logistics project cargo sector. Part of the Sogestran group, MN’s fleet includes the MN Toucan and MN Colibri, built in 1995 and 2000, respectively, and designed in cooperation with the European Space Agency (ESA) Arianespace program, for which MN managed vessel operations over four decades. Those dedicated vessels for space-related cargoes have carried the Euclid telescope from Savona, Italy, to Port Canaveral; the largest European geostationary satellite from Fos in France to Kourou, French Guiana; and the James Webb telescope from Seal Beach, California to Kourou. “The MN Toucan and MN Colibri are older vessels but very well maintained,” Mathias Audrain, MN’s commercial and business development manager, told the Journal of Commerce. “However, 2026 will see a new vessel order which will meet full space industry requirements, to carry all kinds of launchers and satellites.” The vessel will be specifically designed for the space industry and could be joined by a second order in 2026. “We must have two vessels because delays are not permitted in this industry,” Audrain said, adding the first vessel could be ready in less than three years. Despite its promised sophistication, the ship will be restricted to a maximum length of 120 meters to access Kourou port in French Guiana and other small ports. “Access to Kourou is tricky, via a narrow river, so we are limited on length,” Audrain said. “The main characteristics will be close to our present vessels, which cross the Atlantic with a five-meter draft but then we are able to de-ballast when we arrive, reducing draft to three meters in order to reach the Kourou pier.” Dealing with bureaucracy Modules and components transported for space range from overweight, oversize rocket sections and launchers to tiny, fragile and temperature-sensitive items – and yet geopolitics and bureaucracy, rather than the cargo itself, are said to present some of the toughest and most complex headaches for logistics specialists. Craig Russell, project manager at freight forwarder Pinnacle International Freight in the UK, described handling and shipping as the “relatively easy part.” He said the main challenges are geopolitical. “How do you move technologically sensitive components that could be under export controls, or how do you support cross-border collaborations with customs?” he said. Britain’s exit from the European Union has added to the complexities for shipments between the UK and EU, and the trade and tariff disputes set off by the Trump administration have also had their impact, along with ever-changing sanctions regimes. Pinnacle has an office at Space Park Leicester, a UK hub for space research located within the East Midlands Freeport. Russell believes there are massive opportunities ahead for project cargo logistics as space operations continue to soar. Freeport status could open opportunities for manufacturing, consolidating and assembling satellites and other products for export, but only if managed correctly. “This is a case of the [UK] government going top level down, putting these freeports in but without the practical support of how applying and managing a customs bonded facility works,” Russell said. Conversely, the US used to be relatively easy to navigate for space logistics because many products were duty free and could move in and out freely. Now, duties, temporary import bonds and other procedures make the process more complicated. Plus, geopolitical factors mean that trade partners for products and services change frequently. “In short, it is the procedural and compliance side rather than the practical that is raising the challenges,” Russell said. Security is tight and confidentiality is essential in this sector – and there is no room for error, he added. “Transporting space components is complex and planning can start several months – even years – before just one transport,” Russell said. “Everything must go smoothly – it is not during the operation that you should discover any issues. It’s a case of check, check and triple check.” Contact Felicity Landon at felicity@felicitylandon.com.

Project cargo

Breakbulk News

Maritime

Space logistics newbuilding to service booming project cargo sector

<div class="phx-topic abstract-wrapper">The vessels take the carrier’s total order book to 36 ships to be delivered between 2026 and 2030, increasing its owned fleet to 150 ships totaling 927,250 TEUs.</div>

The vessels take the carrier’s total order book to 36 ships to be delivered between 2026 and 2030, increasing its owned fleet to 150 ships totaling 927,250 TEUs.

<div class="phx-topic">Taiwan's Wan Hai Lines will bolster its owned vessel fleet after approving a deal Tuesday worth almost $500 million for six 6,000-TEU dual-fuel LNG-powered container ships. Wan Hai, ranked 11th in the world in terms of capacity by Alphaliner, said the ships will be built by China's CSSC Huangpu Wenchong Shipbuilding. The vessels are priced between $75.2 million and $82 million each, giving the deal a total value of $451.2 million to $492 million, the carrier said in a Taiwan stock exchange filing. The vessels take Wan Hai's total order book to 36 ships to be delivered between 2026 and 2030, increasing its owned fleet to 150 ships totaling 927,250 TEUs. Its order book includes 12 16,000-TEU ships that will be the largest in Wan Hai’s fleet when they are delivered in 2027 and 2028. Wan Hai gave no details of where the new 6,000-TEU ships will be deployed, although they could join the carrier’s existing 600-series vessels on services between Asia and the Indian sub-continent. The ships further reinforce liquefied natural gas (LNG) as the next generation fuel of choice for ocean carriers, with this latest contract taking the total capacity of LNG-powered vessels on order to almost 4.2 million TEUs. That is double the 2.1 million TEUs of methanol-fueled vessels on order, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b5f12c4e-8754-4025-849c-a8b4e06ae6f9"></dynamic-object></div>The shipbuilding order is part of a move by Wan Hai to expand its service network. In the first of these, the carrier's directors approved a $96 million deal Tuesday with Yokohama-Kawasaki International Port to lease for 20 years the Honmoku-futo D-4 Container Terminal in Japan's second-largest container port. Wan Hai will take over the terminal when CMA CGM, the current operator, moves to Honmoku’s D5 terminal by October next year. The D4 facility, with a quay length of 1,312 feet and three ship-to-shore cranes, has an annual handling capacity of 550,000 TEUs and will augment Wan Hai’s Ohi-5 terminal in Tokyo. The carrier also said it will launch a second trans-Pacific service in conjunction with Ocean Network Express in April or May of next year. The Asia-Pacific 2 loop will be an express service linking North and East China and the US West Coast. The full rotation is Qingdao – Ningbo – Los Angeles – Oakland – Qingdao. The AP2 service “will offer customers with a more comprehensive coverage between Asia and the US West Coast, delivering faster and more reliable transportation solutions to meet customer requirements,” Wan Hai said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Taiwan's Wan Hai Lines will bolster its owned vessel fleet after approving a deal Tuesday worth almost $500 million for six 6,000-TEU dual-fuel LNG-powered container ships. Wan Hai, ranked 11th in the world in terms of capacity by Alphaliner, said the ships will be built by China's CSSC Huangpu Wenchong Shipbuilding. The vessels are priced between $75.2 million and $82 million each, giving the deal a total value of $451.2 million to $492 million, the carrier said in a Taiwan stock exchange filing. The vessels take Wan Hai's total order book to 36 ships to be delivered between 2026 and 2030, increasing its owned fleet to 150 ships totaling 927,250 TEUs. Its order book includes 12 16,000-TEU ships that will be the largest in Wan Hai’s fleet when they are delivered in 2027 and 2028. Wan Hai gave no details of where the new 6,000-TEU ships will be deployed, although they could join the carrier’s existing 600-series vessels on services between Asia and the Indian sub-continent. The ships further reinforce liquefied natural gas (LNG) as the next generation fuel of choice for ocean carriers, with this latest contract taking the total capacity of LNG-powered vessels on order to almost 4.2 million TEUs. That is double the 2.1 million TEUs of methanol-fueled vessels on order, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. The shipbuilding order is part of a move by Wan Hai to expand its service network. In the first of these, the carrier's directors approved a $96 million deal Tuesday with Yokohama-Kawasaki International Port to lease for 20 years the Honmoku-futo D-4 Container Terminal in Japan's second-largest container port. Wan Hai will take over the terminal when CMA CGM, the current operator, moves to Honmoku’s D5 terminal by October next year. The D4 facility, with a quay length of 1,312 feet and three ship-to-shore cranes, has an annual handling capacity of 550,000 TEUs and will augment Wan Hai’s Ohi-5 terminal in Tokyo. The carrier also said it will launch a second trans-Pacific service in conjunction with Ocean Network Express in April or May of next year. The Asia-Pacific 2 loop will be an express service linking North and East China and the US West Coast. The full rotation is Qingdao – Ningbo – Los Angeles – Oakland – Qingdao. The AP2 service “will offer customers with a more comprehensive coverage between Asia and the US West Coast, delivering faster and more reliable transportation solutions to meet customer requirements,” Wan Hai said. Contact Keith Wallis at keithwallis@hotmail.com.

Trans-Pacific

Container Shipping News

Wan Hai inks roughly $500 million deal for six LNG-powered ships

<div class="phx-topic abstract-wrapper">Data from consultants Trade and Transport Group shows the impact of regulatory changes as  de minimis traffic fell significantly while regular air cargo increased.</div>

Data from consultants Trade and Transport Group shows the impact of regulatory changes as  de minimis traffic fell significantly while regular air cargo increased.

<div class="phx-topic">A fundamental shift in trans-Pacific air freight trade flows since the US eliminated the de minimis exemption for low-value goods in May is becoming clearer, with a decline in China-US traffic replaced by booming imports from Taiwan and Vietnam. Data from consultants Trade and Transport Group shows the impact of the regulatory changes as  de minimis traffic fell significantly while regular air cargo increased. “The decline in China to US traffic has been more than offset, particularly by air freight from Taiwan and Vietnam, and it is mainly linked to computers and parts, as well as industrial equipment,” Frederic Horst, managing director of Trade and Transport Group, told the Journal of Commerce. In the first nine months of the year, US imports of air cargo from China were down 10.1% year over year, Trade and Transport data shows. But imports from Northeast Asia as a whole rose 36.4%, while imports from Southeast Asian origins were up almost 50%.  A deeper dive into the data shows US air cargo imports from Taiwan from January through September jumped almost 91% year over year, imports from Vietnam rose almost 80% and imports from Thailand were up more than 40%. Computers and accessories, industrial equipment and parts; audio, video and optical components; and mobile phones comprised the bulk of the air freight shipments. The trend has also been picked up by Taiwan-based Dimerco Express Group, which has urged shippers to factor the supply chain changes into their 2026 shipment plans. “Following changes to US de minimis rules, some direct China-US e-commerce flows have decreased, but more cargo is now routed via alternative hubs and forward-stocking models, making trade lanes more diversified,” Catherine Chien, chairwoman of Dimerco Express Group, said in a market update.  “Demand for high-tech, AI-related and e-commerce shipments continues to drive growth in air freight from the Asia-Pacific region to North America and Europe,” Chien added. “Shippers that can flex between multiple lanes, multiple modes and multiple origin countries will be better positioned than those relying on a single country or mode.” <h3>US import data distorted by e-commerce </h3>The main driver of inbound air cargo from Asia to the US has been e-commerce, which over the past few years has created a growing gap in US air cargo data. But the removal in May of the de minimis exemption for low-value imports from China, followed by the removal of de minimis rules for all US trading partners in August, has led to a fundamental change in the mix of air cargo. “Regular air freight imports – i.e. consignments greater than $2,000 – are up 16.5% for the first nine months, while overall inbound air cargo traffic (to the US) is down 2.5%,” Horst said. Data from air cargo analyst Rotate shows freighter operators have shifted capacity in Asia to follow the moving export trend. Direct air freight capacity offered from Southeast Asia to North America from May 2 – when the de minimis tariff on China imports was eliminated – through November was up 89% at 102,700 tonnes.  <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8d7ed0b1-01de-471d-b540-bed610465c9a"></dynamic-object></div>However, the analyst pointed out that much of Vietnam’s air freight trade is shipped indirectly through Asian hubs in mainland China, Hong Kong, South Korea and Japan, so the actual volume from Southeast Asia to North America is higher. The Freightos Air Index shows China-US rates at a 2025 high exceeding $8/kg this week, higher than last year's $7.30/kg peak, according to a market update from Freightos Tuesday.  The International Air Transport Association (IATA) expects global air volume growth of 3.1% for 2025 and 2.6% for 2026 despite the impact of the US tariffs on volume flows. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A fundamental shift in trans-Pacific air freight trade flows since the US eliminated the de minimis exemption for low-value goods in May is becoming clearer, with a decline in China-US traffic replaced by booming imports from Taiwan and Vietnam.  Data from consultants Trade and Transport Group shows the impact of the regulatory changes as  de minimis traffic fell significantly while regular air cargo increased.  “The decline in China to US traffic has been more than offset, particularly by air freight from Taiwan and Vietnam, and it is mainly linked to computers and parts, as well as industrial equipment,” Frederic Horst, managing director of Trade and Transport Group, told the Journal of Commerce.  In the first nine months of the year, US imports of air cargo from China were down 10.1% year over year, Trade and Transport data shows. But imports from Northeast Asia as a whole rose 36.4%, while imports from Southeast Asian origins were up almost 50%.   A deeper dive into the data shows US air cargo imports from Taiwan from January through September jumped almost 91% year over year, imports from Vietnam rose almost 80% and imports from Thailand were up more than 40%. Computers and accessories, industrial equipment and parts; audio, video and optical components; and mobile phones comprised the bulk of the air freight shipments.  The trend has also been picked up by Taiwan-based Dimerco Express Group, which has urged shippers to factor the supply chain changes into their 2026 shipment plans.  “Following changes to US de minimis rules, some direct China-US e-commerce flows have decreased, but more cargo is now routed via alternative hubs and forward-stocking models, making trade lanes more diversified,” Catherine Chien, chairwoman of Dimerco Express Group, said in a market update.   “Demand for high-tech, AI-related and e-commerce shipments continues to drive growth in air freight from the Asia-Pacific region to North America and Europe,” Chien added. “Shippers that can flex between multiple lanes, multiple modes and multiple origin countries will be better positioned than those relying on a single country or mode.”  US import data distorted by e-commerce  The main driver of inbound air cargo from Asia to the US has been e-commerce, which over the past few years has created a growing gap in US air cargo data. But the removal in May of the de minimis exemption for low-value imports from China, followed by the removal of de minimis rules for all US trading partners in August, has led to a fundamental change in the mix of air cargo.  “Regular air freight imports – i.e. consignments greater than $2,000 – are up 16.5% for the first nine months, while overall inbound air cargo traffic (to the US) is down 2.5%,” Horst said.  Data from air cargo analyst Rotate shows freighter operators have shifted capacity in Asia to follow the moving export trend. Direct air freight capacity offered from Southeast Asia to North America from May 2 – when the de minimis tariff on China imports was eliminated – through November was up 89% at 102,700 tonnes.   However, the analyst pointed out that much of Vietnam’s air freight trade is shipped indirectly through Asian hubs in mainland China, Hong Kong, South Korea and Japan, so the actual volume from Southeast Asia to North America is higher.  The Freightos Air Index shows China-US rates at a 2025 high exceeding $8/kg this week, higher than last year's $7.30/kg peak, according to a market update from Freightos Tuesday.   The International Air Transport Association (IATA) expects global air volume growth of 3.1% for 2025 and 2.6% for 2026 despite the impact of the US tariffs on volume flows.  Contact Greg Knowler at  greg.knowler@spglobal.com . 

Air Cargo Forwarder News

Air Cargo

Rising US air freight imports from Taiwan, Vietnam offset drop in China trade 

<div class="phx-topic abstract-wrapper">The US Department of Transportation estimates there are about 200,000 holders of non-domiciled commercial driver’s licenses, most of whom would lose eligibility under a proposed rule that would bar certain immigrants from operating commercial vehicles.</div>

The US Department of Transportation estimates there are about 200,000 holders of non-domiciled commercial driver’s licenses, most of whom would lose eligibility under a proposed rule that would bar certain immigrants from operating commercial vehicles.

<div class="phx-topic">The trucking industry differs on how much of any impact stricter federal rules on immigrants driving in the US will have, with one side arguing that a crackdown will move the needle on subdued pricing and the other warning that only a demand rebound will end the three-year freight slump. The US Department of Transportation (USDOT) estimates there are about 200,000 holders of non-domiciled commercial driver’s licenses (CDLs), most of whom would lose eligibility under a proposed rule that would bar certain immigrants, including asylum seekers, from operating commercial vehicles. No one has confirmed the number in the Federal Motor Carrier Safety Administration’s (FMCSA’s) emergency interim rule; states issue CDLs, not the federal government. “There is a lack of clarity on where the 200,000 figure comes from in the first place,” Jason Miller, professor of supply chain management for Michigan State University, told the Journal of Commerce. Under the DOT’s proposed rule, only drivers holding H-2A, H-2B or E-2 visas would be permitted to retain non-domiciled CDLs. But the US Court of Appeals for the District of Columbia Circuit has placed the rule on hold indefinitely. Even so, some industry executives argue that enforcement activity — rather than the rule itself — could have a more immediate effect on trucking capacity. Thom Albrecht, chief revenue officer of insurer Reliance Partners, said he believes up to 15% of current US truckload capacity may be tied to illegitimate operations, including cargo theft and carriers operating outside of US rules and regulations. Albrecht emphasized that the figure is an estimate based on publicly available CDL data, not an exact count. “That doesn’t mean we have 15% excess capacity. I would suggest it’s probably 2% to 3%. It would not take a whole lot for the industry to start feeling better,” he said during a webinar last week hosted by Deutsche Bank. “There have been so many bad actors let into this industry over the last few years. That’s the single-biggest deterrent for this industry to get healthy.” Ryan Joyce, CEO of cargo security firm Genlogs, said his company found nearly 1,000 Mexican trucking companies that are legally allowed to cross the border with international freight, but also operating far beyond the permitted zone inside the US. Joyce said those carriers are engaging in cabotage — legally delivering an international load, then illegally hauling a domestic load between two US locations. “The top violator, for example, was observed hundreds of times operating as far north as Minnesota, Wisconsin, and New York,” Joyce said on the Deutsche Bank webinar. He also said the non-domiciled CDL problem is tied to cargo theft, with some unsafe carriers shutting down one day, paying cash to obtain a new motor carrier number, and then reopening the next day, often referred to as “chameleon carriers.” Albrecht and Joyce are among those who expect a swift market response as insurers and USDOT increase scrutiny of illegitimate operations. “I follow certain threads of truck drivers online, and there are discussions that a lot of these non-domiciled CDLs coming up for renewal won’t be renewed,” Albrecht said on the webinar. “A lot of them have said that post-Christmas, that’s it for them. That this is the last hurrah.” Others, however, argue that the non-domiciled CDL and cabotage crackdowns will not produce a sudden spike in trucking rates. <h3>Skepticism abounds </h3>In audits conducted of Minnesota and New York, most of the violations cited by USDOT involved otherwise properly issued non-domiciled CDLs in which the license expiration date extended beyond the driver’s employment authorization, rather than wholesale ineligibility. And even when drivers with a valid non-domiciled CDL fail an English-language proficiency exam, many continue operating once highway patrol leaves the scene. Police cannot immobilize the vehicle because it is the driver, not the truck, who is taken out of service. “The driver will just wait a little bit and once the officer leaves, he’ll just drive off as if nothing happened,” said Cliff Bates, former owner of Capital City Trucking, a trucking company that went out of business within the last two years. “Even when the driver is dropped off at the next exit, the minute the patrol leaves, he’s walking back down the highway to the truck again.” While Bates agrees that reckless driving by some non-domiciled CDL holders is a major problem, he questions how quickly the Trump administration can act. “I think they’re going to cut off the spigot for new CDLs, but I question the assumption that this administration will act swiftly with midterms coming in less than a year,” Bates told the Journal of Commerce. He said rapid enforcement could raise rates and, by extension, consumer prices. Still, broader macroeconomic factors may limit how much enforcement alone can shift the market. Slashing capacity does not address weak US manufacturing data that has softened truckload demand, according to Miller. He noted, for example, that single-family building permits have fallen 10% from last year, as of the last update before the US government shutdown, and that fracking activity isn’t going to rebound with crude oil at current prices. “There are also individuals out there with the requisite background who could re-enter the [trucking] industry rather quickly if conditions significantly improve from a pricing standpoint, which would blunt any loss of non-domiciled capacity,” Miller said. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

The trucking industry differs on how much of any impact stricter federal rules on immigrants driving in the US will have, with one side arguing that a crackdown will move the needle on subdued pricing and the other warning that only a demand rebound will end the three-year freight slump. The US Department of Transportation (USDOT) estimates there are about 200,000 holders of non-domiciled commercial driver’s licenses (CDLs), most of whom would lose eligibility under a proposed rule that would bar certain immigrants, including asylum seekers, from operating commercial vehicles. No one has confirmed the number in the Federal Motor Carrier Safety Administration’s (FMCSA’s) emergency interim rule; states issue CDLs, not the federal government. “There is a lack of clarity on where the 200,000 figure comes from in the first place,” Jason Miller, professor of supply chain management for Michigan State University, told the Journal of Commerce. Under the DOT’s proposed rule, only drivers holding H-2A, H-2B or E-2 visas would be permitted to retain non-domiciled CDLs. But the US Court of Appeals for the District of Columbia Circuit has placed the rule on hold indefinitely. Even so, some industry executives argue that enforcement activity — rather than the rule itself — could have a more immediate effect on trucking capacity. Thom Albrecht, chief revenue officer of insurer Reliance Partners, said he believes up to 15% of current US truckload capacity may be tied to illegitimate operations, including cargo theft and carriers operating outside of US rules and regulations. Albrecht emphasized that the figure is an estimate based on publicly available CDL data, not an exact count. “That doesn’t mean we have 15% excess capacity. I would suggest it’s probably 2% to 3%. It would not take a whole lot for the industry to start feeling better,” he said during a webinar last week hosted by Deutsche Bank. “There have been so many bad actors let into this industry over the last few years. That’s the single-biggest deterrent for this industry to get healthy.” Ryan Joyce, CEO of cargo security firm Genlogs, said his company found nearly 1,000 Mexican trucking companies that are legally allowed to cross the border with international freight, but also operating far beyond the permitted zone inside the US. Joyce said those carriers are engaging in cabotage — legally delivering an international load, then illegally hauling a domestic load between two US locations. “The top violator, for example, was observed hundreds of times operating as far north as Minnesota, Wisconsin, and New York,” Joyce said on the Deutsche Bank webinar. He also said the non-domiciled CDL problem is tied to cargo theft, with some unsafe carriers shutting down one day, paying cash to obtain a new motor carrier number, and then reopening the next day, often referred to as “chameleon carriers.” Albrecht and Joyce are among those who expect a swift market response as insurers and USDOT increase scrutiny of illegitimate operations. “I follow certain threads of truck drivers online, and there are discussions that a lot of these non-domiciled CDLs coming up for renewal won’t be renewed,” Albrecht said on the webinar. “A lot of them have said that post-Christmas, that’s it for them. That this is the last hurrah.” Others, however, argue that the non-domiciled CDL and cabotage crackdowns will not produce a sudden spike in trucking rates. Skepticism abounds In audits conducted of Minnesota and New York, most of the violations cited by USDOT involved otherwise properly issued non-domiciled CDLs in which the license expiration date extended beyond the driver’s employment authorization, rather than wholesale ineligibility. And even when drivers with a valid non-domiciled CDL fail an English-language proficiency exam, many continue operating once highway patrol leaves the scene. Police cannot immobilize the vehicle because it is the driver, not the truck, who is taken out of service. “The driver will just wait a little bit and once the officer leaves, he’ll just drive off as if nothing happened,” said Cliff Bates, former owner of Capital City Trucking, a trucking company that went out of business within the last two years. “Even when the driver is dropped off at the next exit, the minute the patrol leaves, he’s walking back down the highway to the truck again.” While Bates agrees that reckless driving by some non-domiciled CDL holders is a major problem, he questions how quickly the Trump administration can act. “I think they’re going to cut off the spigot for new CDLs, but I question the assumption that this administration will act swiftly with midterms coming in less than a year,” Bates told the Journal of Commerce. He said rapid enforcement could raise rates and, by extension, consumer prices. Still, broader macroeconomic factors may limit how much enforcement alone can shift the market. Slashing capacity does not address weak US manufacturing data that has softened truckload demand, according to Miller. He noted, for example, that single-family building permits have fallen 10% from last year, as of the last update before the US government shutdown, and that fracking activity isn’t going to rebound with crude oil at current prices. “There are also individuals out there with the requisite background who could re-enter the [trucking] industry rather quickly if conditions significantly improve from a pricing standpoint, which would blunt any loss of non-domiciled capacity,” Miller said. Contact Ari Ashe at ari.ashe@spglobal.com .

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<div class="phx-topic abstract-wrapper">Although major US gateways have made some progress in promoting data sharing on vessel arrivals, port authorities say more systemic thinking must take place among carriers and their supply chain partners to avoid a repeat of the meltdown that occurred in 2021–22.</div>

Although major US gateways have made some progress in promoting data sharing on vessel arrivals, port authorities say more systemic thinking must take place among carriers and their supply chain partners to avoid a repeat of the meltdown that occurred in 2021–22.

<div class="phx-topic">US container ports are receiving better buy-in from their supply chain partners, including ocean carriers, in sharing shipment information in advance to avoid a repeat of the congestion issues experienced during the post-pandemic cargo tsunami of 2021–22. But greater cooperation will be needed to handle the next cargo surge when it happens, port officials say. Managers of the Northwest Seaport Alliance (NWSA), the Port of Long Beach, the South Carolina Ports Authority and the Port Authority of New York and New Jersey told the Journal of Commerce Port Performance webcast last week their data-sharing efforts are still hung up on the question of what proprietary data is. “We’re getting better buy-in from the carriers, but the issue is every sector of the supply chain thinks its information is proprietary,” said Beth Rooney, port director of the Port Authority of New York and New Jersey. “If we are going to provide efficiency, we must think more systemically and cohesively rather than just focusing on your aspect of the supply chain,” she added. In retrospect, the vessel backlogs, congested marine terminals, displaced chassis, rail car shortages and fill-to-capacity warehouses that ports faced in 2021–22 were due to a lack of communication among supply chain partners, said Joel Britt, vice president-terminal operations at the South Carolina Ports Authority. The answer is greater data sharing among the supply chain partners, he said. “We’re trying to help them to help themselves,” Britt said. <h3>Capacity utilization a key factor in port performance </h3>A key indicator of the congestion ports experienced in 2021–22 was that the major gateways were operating at 90% to 95% capacity utilization, each of the four panelists said. Rooney noted that the industry standard for fluidity is that ports experience congestion after they reach 85% because then they have no buffer to handle cargo surges. Today, the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma is operating at 55% to 60% utilization, Long Beach at 54%, Charleston at 50% and New York-New Jersey 65%, the port officials said. A key difference in today’s supply chain fluidity is that warehouses in those regions are moving each season’s merchandise smoothly through their facilities to make room for the subsequent seasonal shipments, the port managers said. In 2021–22, the warehouses were filled to capacity, which forced importers to store inbound containers where they didn’t belong, such as at rail facilities, in truckers’ yards and on marine terminals. “It takes a long time to claw out of that,” said Jeff Bellerud, chief operating officer of the NWSA. Over the past several years, Seattle-Tacoma has developed or is in the process of locating near-dock yards for temporary storage of containers until they are needed. A second berth was added to the T-5 container terminal, a densification project at the Husky Terminal is underway and the port authority is working with railroads to develop support infrastructure to assemble longer trains and enable quicker train arrivals and departures, Bellerud said. Charleston’s Wando Terminal densification project has doubled the annual capacity of the port’s largest container terminal to 2.4 million TEUs a year, Britt said. And the Hugh Leatherman Terminal expansion project will have three berths with an annual capacity of 2.4 million TEUs, while the port’s near-dock rail project will accommodate 1 million rail moves upon completion, Britt said. Although Long Beach is a landlord port, in some ways it is resembling an operating port, said Noel Hacegaba, chief operating officer at the port. Long Beach is not taking over the operations, but rather is encouraging and contributing to measures that will improve operational efficiency. The Pier S facility is contributing to port fluidity as a logistics center for temporary storage of containers. Long Beach is developing the Pier B on-dock rail support facility for building longer inland point intermodal (IPI) trains to the US interior, a project that will be introduced in phases through 2032, Hacegaba said. In New York-New Jersey, every terminal is densifying its operations to increase capacity because the port authority has no more waterfront property to build on, Rooney said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

US container ports are receiving better buy-in from their supply chain partners, including ocean carriers, in sharing shipment information in advance to avoid a repeat of the congestion issues experienced during the post-pandemic cargo tsunami of 2021–22. But greater cooperation will be needed to handle the next cargo surge when it happens, port officials say. Managers of the Northwest Seaport Alliance (NWSA), the Port of Long Beach, the South Carolina Ports Authority and the Port Authority of New York and New Jersey told the Journal of Commerce Port Performance webcast last week their data-sharing efforts are still hung up on the question of what proprietary data is. “We’re getting better buy-in from the carriers, but the issue is every sector of the supply chain thinks its information is proprietary,” said Beth Rooney, port director of the Port Authority of New York and New Jersey. “If we are going to provide efficiency, we must think more systemically and cohesively rather than just focusing on your aspect of the supply chain,” she added. In retrospect, the vessel backlogs, congested marine terminals, displaced chassis, rail car shortages and fill-to-capacity warehouses that ports faced in 2021–22 were due to a lack of communication among supply chain partners, said Joel Britt, vice president-terminal operations at the South Carolina Ports Authority. The answer is greater data sharing among the supply chain partners, he said. “We’re trying to help them to help themselves,” Britt said. Capacity utilization a key factor in port performance A key indicator of the congestion ports experienced in 2021–22 was that the major gateways were operating at 90% to 95% capacity utilization, each of the four panelists said. Rooney noted that the industry standard for fluidity is that ports experience congestion after they reach 85% because then they have no buffer to handle cargo surges. Today, the Northwest Seaport Alliance (NWSA) of Seattle and Tacoma is operating at 55% to 60% utilization, Long Beach at 54%, Charleston at 50% and New York-New Jersey 65%, the port officials said. A key difference in today’s supply chain fluidity is that warehouses in those regions are moving each season’s merchandise smoothly through their facilities to make room for the subsequent seasonal shipments, the port managers said. In 2021–22, the warehouses were filled to capacity, which forced importers to store inbound containers where they didn’t belong, such as at rail facilities, in truckers’ yards and on marine terminals. “It takes a long time to claw out of that,” said Jeff Bellerud, chief operating officer of the NWSA. Over the past several years, Seattle-Tacoma has developed or is in the process of locating near-dock yards for temporary storage of containers until they are needed. A second berth was added to the T-5 container terminal, a densification project at the Husky Terminal is underway and the port authority is working with railroads to develop support infrastructure to assemble longer trains and enable quicker train arrivals and departures, Bellerud said. Charleston’s Wando Terminal densification project has doubled the annual capacity of the port’s largest container terminal to 2.4 million TEUs a year, Britt said. And the Hugh Leatherman Terminal expansion project will have three berths with an annual capacity of 2.4 million TEUs, while the port’s near-dock rail project will accommodate 1 million rail moves upon completion, Britt said. Although Long Beach is a landlord port, in some ways it is resembling an operating port, said Noel Hacegaba, chief operating officer at the port. Long Beach is not taking over the operations, but rather is encouraging and contributing to measures that will improve operational efficiency. The Pier S facility is contributing to port fluidity as a logistics center for temporary storage of containers. Long Beach is developing the Pier B on-dock rail support facility for building longer inland point intermodal (IPI) trains to the US interior, a project that will be introduced in phases through 2032, Hacegaba said. In New York-New Jersey, every terminal is densifying its operations to increase capacity because the port authority has no more waterfront property to build on, Rooney said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

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North American ports

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More data sharing crucial to avoiding future port congestion: officials

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